China is the world’s largest car market, posting total sales of 24.2 million last year, compared with the United States at approximately 17 million. Ford Motor Co.’s (NYSE: F) prospects in China have dimmed terribly this year, making most of the company’s global initiatives seem like footnotes.
Ford’s press release about Chinese June and year-to-date sales was oddly titled “Ford Announces Half-Year Results, Reinforces Its Commitment to China.” The release did not offer any evidence of reinforcement at all. It did offer specific numbers:
Overall Ford Motor Company China sales totaled 62,057 in June, a 38 percent decline year over year. In the first half of 2018, Ford Motor Company China sold 400,443 vehicles in China, a 25 percent decline year over year. Monthly sales of Lincoln reached nearly 4,400 vehicles in June, a 12 percent increase compared to June 2017. The year-to-date sales for Lincoln totaled more than 24,000 vehicles, a four percent increase year over year.
Ford’s numbers contrasted considerably with General Motors Co. (NYSE: GM) for the same period. The largest U.S. car company announced:
General Motors and its joint ventures delivered 858,344 vehicles in China in the second quarter of 2018. Sales grew 0.7 percent from a year earlier.
Despite the softening of the passenger vehicle market, the Cadillac and Baojun brands achieved record deliveries for the second quarter, while Chevrolet continued to post double-digit growth.
In the first half of 2018, GM deliveries in China grew 4.4 percent on an annual basis to 1,844,396 units. In the second half, the company is adding 10 new and refreshed models, two-thirds of the total for the entire year.
Ford’s new CEO, Jim Hackett, has tried his hardest to sell the company’s future as a leader in electric and autonomous vehicles. It has powerful competition in these areas both from other global manufacturers and tech companies like Alphabet, with its autonomous vehicle unit Waymo that started in 2009. Its cars have posted over 7 million “self-driven” miles. Ford’s initiative cannot approach that. Ford has similar challenges in the electronic vehicle market, led by Tesla.
Before Ford can convince anyone it has solid footing in the future, which is hard to argue, it has to make the case for current success. Based on its Chinese results, that is not possible.